Q: Hi, I have an IRA that I am not actively adding to at this point as I am enrolled in an employer 401(k). I was wondering if I have the money invested appropriately since I am not adding any additional money at this time. The money is currently invested in Fidelity’s Four-in-One Index fund. I was thinking about moving it to a fund that focused on dividends to possibly get more growth – something like Vanguard’s Dividend Growth Fund. Does either option offer any advantages over the other given that I am not adding additional money on a regular basis.
A: Thanks for your question. If you are looking to buy the Vanguard Dividend Growth Fund you should consider VIG (Vanguard Dividend Appreciation ETF). VIG trades as an ETF and you are able to buy it at Fidelity for $7.95 a trade. If you buy the Vanguard Index fund at Fidelity they will charge you around $50 to buy and sell it. The advantages over the all in one Fidelity fund are that you will have transparency and lower cost.
If you want more specific advice feel free to call the office. We offer a free one hour consultation. You can speak with me or one of our other advisors if you like.